The Impact of the Federal Budget Deficit on the Nominal Interest Rate Yield on U.S. Treasury Notes, 1979-2001
This study empirically examines the impact of the federal government budget deficit on the nominal interest rate yield on U.S. Treasury notes over the 1979-2001 period. In a system that includes the monetary base, the civilian labor force unemployment rate, the ex ante real 52 week Treasury bill rate, and the percentage real growth rate of the S&P 500 stock index, ECM (error-correction model) estimation finds that the total federal budget deficit acted to increase the nominal interest rate yield on seven year U.S. Treasury notes over the study period
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Volume (Year): III (2004)
Issue (Month): 2 (March)
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- Cebula, Richard J, 1988. "Federal Government Budget Deficits and Interest Rates: An Empirical Analysis for the United States, 1955-1984," Public Finance = Finances publiques, , vol. 43(3), pages 337-48.
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